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Competition in electricity distribution

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  • Saplacan, Roxana
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    Abstract

    The traditional view of electricity distribution is that it is a natural monopoly. Few authors have explored the question as to whether electricity distributors truly are natural monopolies or not, while observation of the current industrial practice tends to suggest that a "market" for distribution activities does actually exist. This is a paradox for a natural monopoly. Our explanation is that monopoly characteristics well characterise the network infrastructure, but not the network operation service.

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    File URL: http://www.sciencedirect.com/science/article/B6VFT-4SNHNXH-1/2/2b93374ca087f841c8b759f53e1969a3
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    Bibliographic Info

    Article provided by Elsevier in its journal Utilities Policy.

    Volume (Year): 16 (2008)
    Issue (Month): 4 (December)
    Pages: 231-237

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    Handle: RePEc:eee:juipol:v:16:y:2008:i:4:p:231-237

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    Web page: http://www.elsevier.com/locate/inca/30478

    Related research

    Keywords: Natural monopoly Competition Organizational change Regulation;

    References

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    1. Kjell G. Salvanes & Sigve Tjøtta, 1998. "A Test for Natural Monopoly with Application to Norwegian Electricity Distribution," Review of Industrial Organization, Springer, vol. 13(6), pages 669-685, December.
    2. Patrick Bajari & Robert S. McMillan & Steve Tadelis, 2003. "Auctions Versus Negotiations in Procurement: An Empirical Analysis," NBER Working Papers 9757, National Bureau of Economic Research, Inc.
    3. Gunn, Calum & Sharp, Basil, 1999. "Electricity distribution as an unsustainable natural monopoly: a potential outcome of New Zealand's regulatory regime," Energy Economics, Elsevier, vol. 21(4), pages 385-401, August.
    4. Littlechild, S.C., 2001. "Competitive Bidding for a Long-term Electricity Distribution Contract," Cambridge Working Papers in Economics 0112, Faculty of Economics, University of Cambridge.
    5. Jamasb, Tooraj & Pollitt, Michael, 2003. "International benchmarking and regulation: an application to European electricity distribution utilities," Energy Policy, Elsevier, vol. 31(15), pages 1609-1622, December.
    6. Robert Wilson, 2002. "Architecture of Power Markets," Econometrica, Econometric Society, vol. 70(4), pages 1299-1340, July.
    7. Patrick Bajari & Steven Tadelis, 1999. "Incentives versus Transaction Costs: A Theory of Procurement Contracts," Working Papers 99029, Stanford University, Department of Economics.
    8. Jamasb, T. & Pollitt, M., 2000. "Benchmarking and regulation: international electricity experience," Utilities Policy, Elsevier, vol. 9(3), pages 107-130, September.
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    Citations

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    Cited by:
    1. Del Bo, Chiara F., 2013. "FDI spillovers at different levels of industrial and spatial aggregation: Evidence from the electricity sector," Energy Policy, Elsevier, vol. 61(C), pages 1490-1502.
    2. J-M- Glachant & H. Khalfallah & Y. Perez & V. Rious & M. Saguan, 2013. "Implementing Incentive Regulation and Regulatory Alignment with Resource Bounded Regulators," Competition and Regulation in Network Industries, Intersentia, vol. 14(3), pages 265-291, September.
    3. Ohler, Adrienne M., 2014. "Behavior of the firm under rate-of-return regulation with two capital inputs," The Quarterly Review of Economics and Finance, Elsevier, vol. 54(1), pages 61-69.
    4. Shaw, Rita & Attree, Mike & Jackson, Tim, 2010. "Developing electricity distribution networks and their regulation to support sustainable energy," Energy Policy, Elsevier, vol. 38(10), pages 5927-5937, October.
    5. Jamasb, T. & Nepal, R., 2012. "Security of the European Electricity Systems: Conceptualizing the Assessment Criteria and Core Indicators," Cambridge Working Papers in Economics 1251, Faculty of Economics, University of Cambridge.

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